The Differential Effects of Green Finance Instruments on Forestry Enterprises: An Agent-Based Analysis from China

Clarifying how different green finance instruments affect the investment and financing performance of forestry enterprises is critical for enhancing their sustainability. This study adopts an agent-based modeling (ABM) approach to analyze the interactions among core stakeholders (governments, forestry enterprises, financial institutions) in forestry enterprises’ investment and financing activities and elucidates how green finance instruments—namely preferential interest rates, industrial subsidies, and financing guarantees—differentially affect the investment and financing performance of heterogeneous forestry enterprises. Further, it simulates the impacts of different instrument combinations and intensities on green and general investment and financing performance. Results indicate that: (1) Forestry enterprises face constrained financing channels, with unmet green financing demand. (2) Existing green finance instruments exert a significant positive effect on financing performance; specifically, increasing industrial subsidies outperforms enhancing interest rate preferences or expanding financing guarantees in boosting financing performance (especially green financing), though their impact on investment performance is limited. (3) Policy combinations that integrate all three instruments and increase their intensity significantly improve general investment and financing performance, yet they still fall short of effectively driving the green transformation of forestry enterprises. These findings suggest that green finance instruments should avoid market distortions, encourage multi-stakeholder engagement, and shift from direct subsidies towards fostering innovation in the green finance support system.